Gambling on the Future

On The Levelby B.B. OlshinMay 8, 2012

...Protests that lack soul are doomed to failure

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In today’s column, I want to go back a few years to share a past lesson that’s still relevant to the 99%: sometimes protest just doesn’t work. For example, the citizens of Philadelphia tried to reject casinos in 2006 and failed. Here’s how it happened: There were actually two casinos planned for the city. One was going to be in the Fishtown neighborhood and one on Reed Street, near the Delaware River. Residents protested via various organizations, such as “Casino-Free Philadelphia” and the “Philadelphia Neighborhood Alliance,” but the Fishtown progress went ahead anyway. The 1.3 million-square-foot monstrosity opened in 2010 on the former site of the Jack Frost Sugar Company.

The protests also failed to halt the Reed Street casino, which was unable to secure funding on its own merits.

Why did the protests fail?

They failed because the opposition — in this case corporations that were completely in bed with a municipal government — was simply too strong. More importantly, protests fail when the protestors don’t fight for ideals and principles.

I directed the Center for the Creative Economy during the casino debate, when various corporate entities such as Harrah’s Entertainment were pushing for casino construction in Philadelphia. The university-based initiative I led focused on working with the City of Philadelphia to develop creative businesses, design firms, small-scale manufacturing, etc. — and attract artists and other “creative types” to urban areas.

It was an outrageous situation. The city government had just created an organization called “Innovation Philadelphia,” which emphasized development of the “creative economy” but had no problem juggling that worthy mission with the eager pursuit of casino development business.

As the protestors started organizing, I began to notice something very interesting: The main arguments against the casinos centered around parking, corporate responsibility, and the distribution of potential profits and/or taxation. Relevant as these issues were, the core argument against the construction and operation of casinos in Philadelphia was a moral one: casinos and the economic model under which they operate are completely contradictory to the history, economic structure, and culture of the city.
I still remember a day in 2006 when a guy standing on the corner with a clipboard tried to get me to sign a petition to “express concern” about the parking woes the casinos would cause.

This is what I told him: “Your protests are not even really protests! What kind of ideals and principles are you promoting? You’ve got to fight the very concept of casinos and gambling as something inappropriate for a modern, civil society.” My passionate entreaties earned me a blank stare.

Still, my argument was sound. It was all about philosophical ideals, which form the basis of so many successful protests, like the Occupy Wall Street movement. These are movements which call for a more equitable division of our society’s burdens and benefits, and which tell us that “a better world is possible” and “there’s enough to go around.”

The same philosophical underpinning was missing in Philadelphia and would have worked well in a city founded on the principles of industriousness and self-reliance. William Penn built a noble and beautiful city between two rivers, doing his best to create a model of urbanism that had integrity — in direct contrast to what he saw as the corrupt and decadent system of England.

A casino, especially one controlled by a distant corporation with virtually no ties to the city, represents nothing of integrity. Instead, it is simply a vehicle for a corporate entity to gain profit from Philadelphians. It’s a way for an outside entity to funnel the city’s wealth to its investors.

In more recent times, Philadelphia coupled its philosophical underpinning with a solid manufacturing base. It made everything from Stetson Hats to Baldwin Locomotives, earning the title of “Workshop of the World” more than a century before China began to be known as “the world’s factory floor.”

Philadelphia produced high-quality, tangible goods. It earned its income selling the genuine products produced by the hard labor of its citizens.

An industrial economy is designed so people put money into it, investing in a company or idea. They reap the benefits when the company or idea develops into a product that reaches the market.

In this traditional model, the harder a person worked, the more entrepreneurial they were and the better their chance of success. People invested in Philadelphia, because the city had a reputation for hard work and quality workmanship.

Casinos are based on a completely different model: money is invested by an outside entity to build a physical structure in a city somewhere. It doesn’t even matter where — Las Vegas, Atlantic City, Philadelphia — anywhere will do. People then go to this physical structure, sitting for hours indoors in an anonymous, often windowless setting, a setting which has no connection to the city where it is located.

These same people then take their hard-earned money and “invest” it in what are primarily games of pure chance. If they are extremely lucky, they might gain some returns. The people who enter these establishments and “put their money down” are frequently those with the fewest resources to invest. They do so in the vain hope that they can make money through some other method than hard work and careful saving.

The casino-based economy is the American dream gone dangerously awry.

More importantly, this kind of “investment” — i.e., gambling — is a dead-end economic model. Money goes in, but very little is returned to the host community. There are a few winners for every hundred losers, the city derives some income from tax revenues, and some local bars and restaurants benefit slightly. However, ultimately, there is no larger capital gain.

The primary profit from the casino goes back to the corporate entity that controls it — not to the city. This is quite different from the old manufacturing economy, where locally-controlled industries re-invested their profits right here at home.

Gambling is also a carrier of societal ills.

About 2% to 5% of those who gamble turn into problem gamblers with pathological gambling issues, which can lead to them being unable to care for themselves and their loved ones. Problem gamblers have higher suicide and divorce rates than the general public and are more likely to commit criminal acts.

Fifty-six percent of the Gamblers Anonymous members who participated in a 1995 survey in Illinois said they had broken the law to fund their gambling habits.

Sadly, this kind of human wreckage was not a big part of Philadelphia’s debate over casinos. Instead, the issues were mostly driven by mundane business concerns.
Philadelphians were presented with the argument that the casinos would create jobs. That may have been true, but what kind of jobs? Were these jobs that would bring people out of poverty or create a new class of professionals in this city? No.

Job creation in Philadelphia has to come out of substantive, real employment in a revived manufacturing sector, in meaningful service-sector work, and in the creative sector.

I resigned from my position as director of the Center for the Creative Economy a few months after the casino debate.

Why?

I knew the casinos would be built. And I knew that casinos are the antithesis of the creative economy, which is based on creative work — design, visual arts, performing arts, architecture, engineering, and so on. This is the kind of work that produces new ideas and attracts intelligent, creative people to the city. The kind of people who could preserve the best of Philadelphia and help create its future.

Casinos, by contrast, represent a completely “uncreative” economy. They make money without selling any tangible product or meaningful service — other than the hope of “hitting it big.” They don't create anything in terms of new products or new ideas that could be of use to consumers or to the citizens of Philadelphia, or any other city.

Word on the street in Philly these days is that there is another casino planned for the area. At this point, all I can say is, “Why not?” A lot has changed since 2006, and now I know that gambling is, after all, the only economy we’ve got left.

It seems that many U.S. cities have given up on making things at all and abandoned creating healthy economies in this nation. What's the point at a time when federal regulations encourage multinational corporations to sell us high-priced consumer goods made in nations with low-wage workforces.
My real fear is that the trend will continue until wages stabilize at the lowest common denominator. Thne we won't have to worry about losing jobs to China and India any more because we'll be leveled with them.

Benjamin B. Olshin, Ph.D. has worked as a designer, professor of philosophy, and business consultant. He has written and presented on a wide range of subjects, including ancient history, Eastern and Western philosophy, the sociology of technology, and design and culture, and has studied, carried out research, and worked in East Asia, Europe, Africa, Latin America, Canada, and the U.S. His most recent books are available on Amazon.com. He can be contacted at: olshin@verizon.net.